From last month:
The US stock market appears to be expecting a “Trump effect” from his upcoming administration, hitting an all-time high in recent weeks. Similarly, commodities have moved higher, perhaps an indication that the markets expect increased consumption of gold, petroleum, grains, and construction materials.
In addition, global markets ex US climbed back up enough to trigger a buy signal for EFA. Pro-Folio USA will be invested in commodities, Global stocks, and US stocks for the month of January.
The Pro-Folio USA model evaluates its holdings on a monthly basis. There is one (1) trade this month. As of the last trading day of December (30th), we have the following trade signals:
For existing investors:
You should have spent the month of December invested equally in the above 2 holdings marked HOLD or SELL. Now, use 1/3 of your cash balance to buy a position in EFA.
For new investors:
If you are new to Pro-Folio USA this month, you should divide your portfolio into 5 equal parts, and invest one of those parts in each of the securities shown above, marked as “HOLD” or “BUY.” Because you didn’t invest in the “HOLD” components of the model at the time when the buy signal first turned positive, your return on these initial trades may not be reflective of the model’s typical expected returns.
US government bond prices are dropping like a rock the past couple of months, signaling that the market believes they are becoming less valuable. This is due in part to the FOMC committee communications signaling that the rates will be increasing in the future. Also, it seems the markets are predicting that Trump will print more money and not contain the US national debt, making US sovereign debt more risky and less valuable.
Fortunately for us, the Pro-Folio USA model has never lost more than than 1% of portfolio value: that was 2008, the worst year in recent memory and the only year on record that Pro-Folio USA lost value. Keep in mind, the long term average growth of the model is north of 8% per year. We can continue to follow the model with confidence that our assets will be protected.
If you want to get the PDF booklet showing you how to implement the Pro-Folio USA trading model on your own, click here.
If you want to learn more about the Pro-Folio Global upgrade portfolio, click here.
As we enter the first month of 2017, I wish you a year full of prosperity and happiness! Thank you for your interest in Pro-Folio USA!